2001 (7) TMI 1187 - HC - Companies Law

Summary

Issues:
Amendment application under order 6, rule 17, Code of Civil Procedure, 1908 read with rule 6 of the Companies (Court) Rules, 1959 for amending paragraphs and sub-paras. Objection raised by respondent regarding the amendment application citing delay and lack of proper explanation. Application of rules and precedents related to amendment of pleadings, cause of action, and time-barred debts. Interpretation of rule 6 regarding the applicability of the Code to winding up proceedings. Consideration of reasons for delay in producing documents and details of debt acknowledgment.

Analysis:
The judgment pertains to an amendment application filed under order 6, rule 17, Code of Civil Procedure, 1908, in conjunction with rule 6 of the Companies (Court) Rules, 1959, seeking to amend specific paragraphs and sub-paras along with the submission of supplementary documents. The respondent raised objections to the application, contending that it should not be allowed due to the advanced stage of the winding up application and the absence of a valid reason for the delay. Citing rule 7, rule 8, Order 13, rule 2 of the Code, and legal precedents such as Shanti Kumar R. Canji v. Home Insurance Co. of New York, Muni Lal v. Oriental Fire & General Insurance Co. Ltd., and Gopal v. Hira Chand, the respondent argued against the amendment, emphasizing that changes affecting the cause of action and introduction of new claims for time-barred debts should not be permitted without sufficient cause shown for the delay.

The court delved into the interpretation of rule 6, emphasizing that while the Code's principles could expedite winding up proceedings, parties could not automatically claim the full application of the Code's provisions. Referring to the case of Aluminium Corpn. of India v. Laxmi Ratan Cotton Mill, it was clarified that the Companies (Court) Rules outline the specific procedures for handling winding up matters, distinct from regular suits governed by the Code. The applicant justified the delay in producing documents by providing reasons and detailed information regarding the debt acknowledgment, interest payments, dishonored cheques, loan confirmations, and TDS certificates. In response, the respondent did not contest the dues but argued that they were not legally enforceable and were time-barred.

Ultimately, the court deemed it just and fair, in the interest of justice, to allow the amendment application considering the nature of the dues, the potential time-barred status, and the impact on the winding up petition. Consequently, the court granted permission for the proposed amendments, thereby facilitating a more comprehensive consideration of the relevant details and claims in the ongoing proceedings.